ACTG244 EXAM 2 ACTUAL QUESTIONS AND ACCURATE
ANSWERS
Revenues are recorded when collected - CORRECT ANSWER✅✅✅False
The accounting equation is: Equity = Assets + Liabilities - CORRECT ANSWER✅✅✅False
Successful companies have generally generated most of their cash inflows from operating
activities. - CORRECT ANSWER✅✅✅True
The journal entry to record Sales on account will result in a debit to a revenue account -
CORRECT ANSWER✅✅✅False
The purchase of property, plant and equipment is an example of a financing activity - CORRECT
ANSWER✅✅✅False
A company records wages earned by employees in the last week of the year which will be paid in
the following year. The journal entry to record the wages for the last week of the year will
increase liabilities and expense. - CORRECT ANSWER✅✅✅True
The journal entry to record collection of a customer account will result in a credit to Accounts
Receivable - CORRECT ANSWER✅✅✅True
The journal entry to record depreciation increases an expense and increases liabilities. -
CORRECT ANSWER✅✅✅False
Unearned revenue is an example of a current asset - CORRECT ANSWER✅✅✅False
Depreciation expense is part of operating expenses - CORRECT ANSWER✅✅✅True
, Notes payable are liabilities that typically involve the payment of interest. - CORRECT
ANSWER✅✅✅True
The difference between sales and cost of goods sold is known as operating income - CORRECT
ANSWER✅✅✅False
Supplies expense for the year should equal the amount of supplies bought during the year -
CORRECT ANSWER✅✅✅False
Accumulated depreciation is an operating expense - CORRECT ANSWER✅✅✅False
Interest expense is part of non-operating expenses - CORRECT ANSWER✅✅✅True
Debits increase liabilities - CORRECT ANSWER✅✅✅False
ABC company purchases merchandise on account from XYZ company. ABC company records
accounts receivable and revenue. - CORRECT ANSWER✅✅✅False
A building's original cost minus the accumulated depreciation is its net book value. - CORRECT
ANSWER✅✅✅True
The purchase of merchandise inventory is an example of an investing activity - CORRECT
ANSWER✅✅✅False
Accrued wages payable is an example of a liability that arises from operating activities. -
CORRECT ANSWER✅✅✅True
The ending balance of cash appears on the income statement - CORRECT
ANSWER✅✅✅False
ANSWERS
Revenues are recorded when collected - CORRECT ANSWER✅✅✅False
The accounting equation is: Equity = Assets + Liabilities - CORRECT ANSWER✅✅✅False
Successful companies have generally generated most of their cash inflows from operating
activities. - CORRECT ANSWER✅✅✅True
The journal entry to record Sales on account will result in a debit to a revenue account -
CORRECT ANSWER✅✅✅False
The purchase of property, plant and equipment is an example of a financing activity - CORRECT
ANSWER✅✅✅False
A company records wages earned by employees in the last week of the year which will be paid in
the following year. The journal entry to record the wages for the last week of the year will
increase liabilities and expense. - CORRECT ANSWER✅✅✅True
The journal entry to record collection of a customer account will result in a credit to Accounts
Receivable - CORRECT ANSWER✅✅✅True
The journal entry to record depreciation increases an expense and increases liabilities. -
CORRECT ANSWER✅✅✅False
Unearned revenue is an example of a current asset - CORRECT ANSWER✅✅✅False
Depreciation expense is part of operating expenses - CORRECT ANSWER✅✅✅True
, Notes payable are liabilities that typically involve the payment of interest. - CORRECT
ANSWER✅✅✅True
The difference between sales and cost of goods sold is known as operating income - CORRECT
ANSWER✅✅✅False
Supplies expense for the year should equal the amount of supplies bought during the year -
CORRECT ANSWER✅✅✅False
Accumulated depreciation is an operating expense - CORRECT ANSWER✅✅✅False
Interest expense is part of non-operating expenses - CORRECT ANSWER✅✅✅True
Debits increase liabilities - CORRECT ANSWER✅✅✅False
ABC company purchases merchandise on account from XYZ company. ABC company records
accounts receivable and revenue. - CORRECT ANSWER✅✅✅False
A building's original cost minus the accumulated depreciation is its net book value. - CORRECT
ANSWER✅✅✅True
The purchase of merchandise inventory is an example of an investing activity - CORRECT
ANSWER✅✅✅False
Accrued wages payable is an example of a liability that arises from operating activities. -
CORRECT ANSWER✅✅✅True
The ending balance of cash appears on the income statement - CORRECT
ANSWER✅✅✅False
